Calculate the effective annual interest rate for the following: a. A 3-month T-bill selling at $97,645 with par value $100,000
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Ответ:
The effective annual rate is 10%
Explanation:
Future value = Present value * (1+r)^n
(1+r)^n = Future value / Present value
r = (Future value / Present value)^n - 1
Here r is the rate
Substitute the values as below
r = (Future value / Present value)^n - 1
r= ($100,000 / $97,654)^4 - 1
r = 1.10000 - 1
r = 0.10000
r = 10%
Ответ:
The commitments that are made or receive in the future that are made easier by money function if the money’s functions as a store value. Being a store value is meant to save assets in which they are deemed to be precious because of their value.